For six years gold languished below US$1,375 but lately, it broke through and since then it has staged a remarkable recovery that has not shown any signs of slowing down. A falling Australian dollar has added to the rise, resulting in the Australian gold price increasing over $A2,760 per ounce.
The current upward trend in the gold price has shown no sign in slowing, further compounded by the COVID-19 outbreak and gold and other precious metals beings observed as a safe haven. Professional investors seeking gold as a potential safe-haven have been the main force but ABC Bullion has seen a surge of interest by individual investors as well.
The price of gold is primarily set in the London and US gold markets where huge transactions between corporations, Institutions, governments, and individuals occur. The resulting gold price balances demand from buyers with supply from sellers. The price relationship between a piece of fine gold jewellery and gold market prices generally aren’t so clear cut. Gold jewellery, for the most part, is priced for the creativity, workmanship, and exclusivity of an item. Stock items such as engagement rings, earrings mountings, etc. reflect gold ounce prices most.
The jewellery industry operates on a “gold price on date of delivery” model. That means that manufacturers, wholesalers, and retailers, don’t know one day to the next what their gold purchases – or unfilled orders – are going to cost. When the order is filled from a supplier, the daily gold price is consulted, and the metal is priced accordingly.
The last time that gold was trading at over $1800 an ounce, jewellery manufacturers started to move predominantly into the silver and stainless-steel ranges in order to still be able to appeal to customers at the lower price point. Lately our office has experienced a trend in increased sales in platinum alloy, due to the increasing price of gold, also there has been an increase in phone calls asking for the price of gold for the day.
At Palloys, we have remained open throughout the crisis, ensuring we are there to service the industry. Palloys have been invested heavily into streamlining our systems with our sister company ABC Refinery, to ensure that any precious metal product, whether it be fabricated metal, findings, Casting or Finished jewellery, is offered at the best precious metal price.